Finally, in November 2012, Reuters revealed[4] the name of the corporate consulting firm the U.S. Department of Energy (DOE) hired to produce a study on the prospective economic impacts of liquefied natural gas[5] (LNG) exports.

The firm: National Economic Research Associates[4] (NERA) Economic Consulting, has a long history of pushing for deregulation. Its claim to fame: the deregulation “studies” it publishes on behalf of the nuclear, coal, and oil/gas industry - and as it turns out, Big Tobacco, too.

This conclusion drew metaphorical hisses from many analysts, including prominent shale gas market economist and former Wall Street investor Deborah Rogers[17], who now maintains the blog Energy Policy Forum[18]. Her critique cut straight to the very foundation of the study itself, stating[19] that “economic model[s] are only as good as their inputs.”

In fact, it is neither difficult nor unusual for models to be designed to favor one outcome over another. In other words, models can be essentially reverse engineered. This is especially true when the models have been commissioned by industries that stand to gain significantly in monetary terms. Or government agencies which are perhaps pushing a political agenda.

Beyond its history working as a hired gun for the fossil fuel industry[4], NERA also has deeper historical roots producing “smoke and mirrors” studies on behalf of the tobacco industry. The long view of the firm's past is something NERA would likely rather see “go up in smoke,” forever buried in the historical annals. But that would be a disservice to U.S. taxpayers since NERA continues to receive government contracts to produce tobacco-era disinformation to this day.

“Doubt is our product[21],” a tobacco industry CEO once said of the playbook, “since it is the best means of competing with the 'body of fact' that exists in the minds of the general public. It is also the means of establishing a controversy.”

NERA Health “Benefits” of Smoking

A May memo[23] from that year written by then NERA Vice President[24]William B. Shew[25] (who now works at the previously mentioned Hudson Institute as an Adjunct Fellow alongside NERA Founder, Irwin Stelzer) addressed to Arnold & Porter[26] attorney Thomas Silfen says the tobacco industry should aim to explain the so-called health “benefits” of smoking.

Most studies don't explain “the satisfactions that induce smokers to put up with health hazards,” Shew explains in the memo[23]. “This imbalance would be rectified by looking at the satisfaction derived from smoking.”

At the time of the internal memo's publication, Arnold & Porter served as national counsel for Philip Morris.

A memo published in 1988 by Silfen[27] posits that Big Tobacco has an obligation going forward to overcome its “long agony over health issues–to get the industry out of the 'it hasn't been proven' trap once and for all.”

SourceWatch details that the Tobacco Institute hired Ogilvy[31] “to provide public affairs consulting services aimed at helping the Instutitute fight cigarette excise taxes, public smoking restrictions and to help with coalition building issues,” proceeding to explain[31] that it helped to “devise ad campaigns to take the public's focus off the health hazards of secondhand tobacco smoke.”

Given this premise, it's no shock NERA concluded that the concerns about the effectiveness of Big Tobacco's advertising charm offensive were overblown.

“The issue of whether cigarette advertising has had any effect on cigarette consumption per adult in Western countries over the last several decades remains uncertain,” NERA explained in the lenghty report now posted on the Tobacco Archives[39]. “However, it seems clear that advertising has had at most a minor effect, if any, on consumption per adult.”

Should Firm with Big Tobacco Roots Be Trusted?

The Sierra Club is skeptical of the Obama DOE's choice of NERA as the contractor to perform the fracked gas LNG export study. The Club just filed a Freedom of Information Act request[46] to ascertain exactly how the Department went about choosing NERA for its “study” that will play a large part in shaping the future of global energy markets.

“Deciding to export the U.S. gas supply is a major public decision,” Deb Nardone, director of the Sierra Club’s Beyond Natural Gas Campaign, said in a press release[47]. “We deserve a full and fair conversation about it. That’s why we deserve to know how and why DOE picked this anti-environmental, pro-corporate consultant for this crucial report.”

With easily apparent deep-seated roots dating back to the halcyon days of Big Tobacco, the DOE's NERA selection begs the question: Can one view the NERA/Obama DOE economic findings on LNG exports as anything but a deeply cynical PR ploy?

Update (5:33 PMCST): Over 200,000 public comments were delivered to the DOE, according to a Sierra Club press release[48]. “The public should be outraged to hear that domestic supplies of gas would be shipped overseas and that households which rely on a paycheck will see no benefit, which is clearly stated in the report,” said Nardone[48]. “Most Americans rely on a paycheck. Meanwhile communities all across the country are left footing the bill to clean up contaminated water supplies and with increased medical bills due to air pollution. Exporting fracked gas is clearly not in the best interest of the United States. DOE and President Obama must not accept this flawed study.”